Source: Talking Li, Talking Outside.
Although Binance Alpha 2.0 was launched on the 18th of this month, I didn’t update my experience right away because I've had no interest in trading MemeCoins recently. However, a couple of days ago (March 24th), after updating the app, I casually bought a small amount of a coin in the Alpha area to try it out, and the operation was indeed very smooth, equivalent to directly purchasing DEX tokens within Binance (CEX).
Maybe because the operation was too smooth, the coin I bought lost almost 30% in less than a day. However, since it was a small test, I won't take that loss too seriously. What I mainly want to say is that, from a developmental perspective, Binance Alpha seems to completely blur the lines between CEX and DEX, while also allowing some on-chain tokens to directly obtain liquidity from Binance, enabling ordinary users (novices) to easily acquire some on-chain assets without worrying about slippage, GAS, bridging, and other issues. This is indeed a form of progress.
1. Turning point in the war between CEX and DEX.
Since the launch of Binance Alpha 2.0, it has been only about a week, and its trading volume has approached 94,900 transactions, with a volume exceeding $113 million. In the current overall low sentiment market, it can be said to be performing well as shown in the figure below.
Many people were still discussing the future war between CEX and DEX, but from this, we can foresee that perhaps in the future, there will no longer be any so-called competition between CEX and DEX. Instead, whoever can seamlessly integrate both will be the ultimate winner.
Of course, we are only looking at the issue from a developmental perspective. If you look at it solely from the current liquidity perspective, you could also argue that Binance is just thinking of ways to squeeze the market dry.
2. Market uncertainty and opportunities.
As we mentioned in the previous article (March 24th), currently, beyond the hotspots created by CZ (MemeCoins, wallet new activities), it seems that the market has fallen into a kind of persistent silence. Everyone seems to be waiting for a bigger black swan or a more significant positive factor (such as a Fed rate cut, changes in Trump's tariff policies, etc.).
However, at the same time, it's interesting that many projects (token prices) have actually been gradually rising since around March 15th. We can easily see this by looking at the corresponding daily trends. For example, Pendle, which is on my watchlist, has already risen by about 50% in the last two weeks (from $1.9 to $2.9), but not many people are discussing it.
Of course, what I mean to express is not that a significant change is about to happen or that the so-called altcoin season is coming. Discussing whether the bull market will return or if the altcoin season is coming now will be criticized and may also be misleading. What I mainly want to express is just a thought: if you are still paying attention to this market, whether in the short, medium, or long term, you need to find your own perspective to conduct the necessary in-depth understanding so that you have a higher probability of discovering potential opportunities before others. Such opportunities often appear when most people are pessimistic or desperate. Conversely, when the opportunities that most people can see or are competing for become apparent, you should consider exiting.
Let me give another simple example. For instance, can you recall what you were doing last September (2024)? What different market aspects did you notice then? What specific actions did you take?
If you can't recall anything, you might consider reviewing our series of articles from the same period last year, reading them again; you might gain some new insights. As shown in the figure below.
In summary, it’s still the point we made in our previous article: there will always be various opportunities in this market. We should not be overly obsessed with the so-called bull or bear markets. A bull market does not guarantee you will make money, nor does a bear market mean you will definitely lose money. The market fundamentally consists of three structures (upward, downward, sideways), and we just need to grasp the rhythm of different periods according to our risk preferences and find our own opportunities.
Every investor hopes to make money, but if everyone makes money, then where does the money come from? Simply put, the reason you can make money in the market is that others are losing money. If we categorize investors (individual investors), they can be roughly divided into three types.
Ordinary investors: Most people will compensate for their learning or cognitive deficiencies in this field by making mistakes (such as trading losses or being scammed).
Blind investors: These individuals often repeat mistakes thoughtlessly, without seeking improvement, and always place their hopes of making money directly on others.
Smart investors: They can learn from their own mistakes/experiences, and even from the mistakes/experiences of others, to continuously optimize and improve their trading strategies.
Based on the investment group classification above, the main direction of money flow is clear: it flows from blind investors to ordinary investors, and then continues to smart investors.
Many people think making money in the crypto space is as easy as breathing simply because they only see the 0.1% of people who make big money. However, these people are difficult to replicate easily. In fact, trading (investing) is a long-term process, and as we mentioned earlier, we can only adjust our mindset, lower our ego, and learn and experience ourselves. When you continuously gain new perspectives, many previously confusing issues may resolve directly. Through this accumulation, when market fluctuations occur, our minds will have the composure to persist, which essentially follows the same logic as practicing basic skills in daily learning or muscle training. Only on this basis can we potentially discover some opportunities earlier or more easily than others.
At the same time, because the market has uncertainties, it creates new opportunities. Everyone knows that the sun will definitely rise from the east tomorrow, so there won't be any money-making opportunities in that (no one will bet on which direction the sun will rise tomorrow). But if I tell you (this is just an example and a hypothesis) that Bitcoin has a 75% chance of seeing a price starting with 9 in the next few weeks, and a 25% chance of continuing to see a price starting with 7, then there will actually be certain opportunities in that. In such uncertain situations, what would you do?
As for what you will do, I don’t know and can’t provide specific trading advice. Many big names will tell you that Bitcoin will fall below $50,000, while many others will tell you it will rise above $200,000... but does that really matter to you? Are you betting on tomorrow or the next ten years in the crypto space?
Never think of yourself as smarter than the market; no one can know for certain what will happen next. Our reasonable approach should be: to keep an open mind to all possible situations, plan our trades by allocating different probabilities, and actively pay attention to the triggering factors that change those probabilities. We should customize plans in advance (at least two plans: Plan A + Plan B, including how to participate, what to participate in, when to participate, and when to exit, etc.).
Here, the only suggestion I can give is: you can take a certain proportion of your position to engage in short-term risks, such as pursuing higher-risk altcoin or MemeCoin opportunities, but all your short-term operations, including your larger positions, should ultimately point towards a long-term goal of accumulating more Bitcoin (rather than altcoins).
From a broader macro perspective, we are still likely in a bull market cycle structure.
From a mid-term time frame perspective, Bitcoin seems to be attempting to break through the local range formed by the local peak (but Bitcoin is still in a mid-term downward channel; we will see if it can break through the $92,000 position this week or next). Some altcoins have also begun to show signs of recovery (but this may not necessarily be driven by fundamental rebounds; it could be due to a new wave of short liquidations leading to price recoveries). Of course, it could also fail to break through; we need to continue observing and waiting.
From the perspective of short-term market sentiment, we are indeed in a 'bear market' atmosphere (since the local peak of this cycle, many altcoins have fallen more than 70%).
From the different perspectives above, the strategies adopted should also be different. For example, I personally prefer to look at the issue from a macro perspective, so I keep a large position in Bitcoin without moving it. During this time, one only needs to maintain enough patience. However, if you wish to take action based on a mid-term framework or short-term sentiment, you should keep your mind clear and avoid falling into passivity (such as implementing strict take-profit/take-loss trading plans or necessary hedging strategies), actively seeking what you want to see (rather than what is often recommended to you or news pushed to you daily by software). Once you discover potential opportunities (things you believe have a high probability of happening), then execute immediately.
3. Examples of some practical price reference indicators.
As for some reference indicators, there are actually many available. Previous articles from Talking Li, Talking Outside, have shared quite a few practical indicator tools. Here we will briefly list a few more (using Bitcoin indicators as an example):
- Large fund flows in exchanges (as shown in the figure below)
Currently, there has been a significant outflow of Bitcoin. On March 26th, 33,500 Bitcoins were transferred from exchanges to cold wallets. This may (just a speculation) indicate that the activity frequency of large holders or institutions is increasing, accumulating from the secondary market.
- Inflows/Outflows of ETF funds (as shown in the figure below)
Since March 17th, Bitcoin ETF funds have begun to show net inflows again. Although the inflows have slowed down recently, they still maintain a positive inflow. The inflow of ETF funds often has a positive impact on short-term market sentiment, and the increase in total ETF holdings can also serve as long-term support for Bitcoin prices.
- Short-term/long-term holder status (as shown in the figure below)
Looking at the current state of short-term holders, the average holding cost for short-term investors (or speculators) is around $93,500, which is at a relatively historical high and also above the current market price of $87,300 (the Bitcoin price at the time of writing). Combined with the trend, the number of short-term speculators is slowly decreasing. These individuals may be experiencing emotional pressure from being trapped or cutting losses, and the short-term buying power seems somewhat insufficient. However, the positive aspect is that as short-term speculators exit, the market will gradually become healthier.
- Chip distribution structure situation (as shown in the figure below)
From the current distribution of chip concentration areas, several important ranges have formed. For example: the historical accumulation area near $65,000 (the support zone indicated by the red line in the figure above), the new chip density area near $97,000, and the current chip range of $80,000 to $90,000. Further, as we mentioned earlier, we should first see if it can break through the range near $92,000. If it breaks effectively, then it may enter a new upper range.
Due to space limitations, we will only briefly list the above indicators.
In summary, trading is not luck; it's a discipline and a system. Think about what your ultimate goal is and keep at it. Never risk making any trades that exceed what you can afford to lose.